TORONTO -- Ontario's Liberal government unveiled a $330-million, five-year aid package for the troubled forestry sector Thursday that was immediately attacked as "too little, too late" by labour leaders, industry representatives and opposition critics.
The plan includes $150 million over three years to encourage forestry companies to expand and modernize, but the private sector will have to pay most of the costs of the projects.
"We basically think the $150 million could lever up to $1.2 billion in new investment," Natural Resources Minister David Ramsay said as he announced the aid package in Thunder Bay.
The forestry loan program is similar to the government's $500-million package for the auto sector, which has generated billions in new investments from Ford and General Motors.
Premier Dalton McGuinty admitted the package won't prevent more mill closures and layoffs in the north, but said it was aimed at helping Ontario's forestry companies be more competitive.
"It's designed to help put the industry on a stronger footing going forward," McGuinty said. "It is not designed -- because it would be impossible to do so -- to protect all existing jobs."
Ontario's largest union of forest-industry workers attacked the announcement as "pathetically anemic" and called for an emergency debate in the legislature.
"In real practical terms, it doesn't do anything to lift the boot of uncertainty from the necks of forest-dependent communities," said Cec Makowski of the Communications, Energy and Paperworkers union.
"There are huge parts of this province facing economic devastation because of mill closures and other cutbacks."
The Ontario Forest Industries Association said the aid package falls far short of what is needed to turn the sector around to save tens of thousands of jobs at risk in Ontario, and rejected the government's claim that the industry needs to modernize.
"We're already modern, for God's sake," said president and CEO Jamie Lim. "If I hear that once more I'm going to have to jump off my balcony."
Ontario's delivered wood cost is $55 U.S. a cubic metre, compared with $44 in British Columbia and $36 in Manitoba, said Lim, arguing that Ontario forest companies need help with energy costs and road construction to narrow the gap.
The government did pledge $28 million annually to maintain forest access roads, but Lim said that's only about a quarter of the costs companies face each year to construct and maintain logging roads that are open to all drivers.
"The industry absolutely did not expect to see a complete close on that $20 gap in delivered wood costs," said Lim. "We were quite disappointed that today's announcement really just brought things down by a little more than a dollar."
Ramsay ruled out as too expensive a recommendation to provide a 50 per cent tax credit for trucks that haul trees from the forest to mills.
"Once you open that door then you're going to get everybody else also looking for the same assistance on the excise tax on fuel or gasoline," he said. "That's just a big nut to crack."
New Democrat Leader Howard Hampton said the aid package won't attract much new investment because it failed to address electricity costs that are nearly three times those faced by competitors and wood costs that are also far higher than in other provinces and states.
"We're not going to see new investment in Ontario's forest sector as long as Ontario has the highest electricity rates in North America (and) as long as Ontario has the highest wood costs in North America," Hampton said.
"That's basically where the McGuinty government has put this industry now."
Conservative Leader John Tory called the forestry package "inadequate" and "a fundamental betrayal," and said it will not stop the economic damage from layoffs in northern Ontario.
"People in communities in the north are losing their jobs and this announcement will be little comfort to them," Tory said.
Ramsay and McGuinty also urged the federal government to come forward with aid for Ontario's forestry sector.
"Today I've basically laid down the gauntlet and said, `I challenge you to come in and help too,"' Ramsay said.
The industry, which has annual sales of $18 billion, said Ontario is quickly losing its competitive edge because of rising fuel and electricity costs, a higher Canadian dollar, and competition from low-cost countries such as Russia, China and South Korea.Ottawa Citizen
